The Challenger Sale

The Challenger Sale: Taking Control of the Customer Conversation

by Matthew Dixon and Brent Adamson

A survey of the attitudes and activities of thousands of frontline sales managers across 90 companies around the world showed 3 key information:

I. There are 5 types of sales reps: Factor analysis done on the data showed that there are 5 types of sales reps:

• The hard worker (21% of the sample):

They are dedicated to the job, go the extra mile to see that they accomplish their goals.

• The challenger (27% of the sample):

They have a deep understanding of the customer’s business and are not afraid to share their ideas. They are assertive and push customers to try new things.

• The lone wolf (18% of the sample):

They are very confident in themselves and flout the rules to follow their instincts. They get the job done.

• The relationship builder (21% of the sample):

They are all about building strong personal and professional relationships and meeting the customer's needs.

• The reactive problem solver (14% of the sample):

They are highly reliable and pay attention to details.

Even though every sales rep at some point or the other does a few things from the different categories listed above, they often fall in one major category.

With the way Challengers teach customers new things that differentiate them from the competition, tailor the teaching message, and maintain control during a sale, the customer is convinced more quickly. This makes this model the most successful one.

To win a customer over, you need to teach them new things. But for your teaching efforts lead to more business for you, they have to meet the following criteria:

• It must lead to your unique strengths:

For your teaching to generate profit, you have to ensure that you can solve your customer's problems and also that you possess the necessary skills to.

• It must challenge a customer's assumptions:

Whatever you teach your customers has to teach them something. It has to challenge their assumptions and speak directly to their world in ways they haven’t thought of or fully appreciated before.

• It must catalyze action:

It is not enough to change the way customers think. You have to get them to act. But before they buy anything, customers first need to understand what’s in it for them to fix their problem. You do this by helping customers calculate the costs they’re incurring or the returns they’re forgoing by failing to act on the opportunity you’ve just taught them.

• It must scale across customers:

You need a small number of powerful insights that are applicable across the broadest possible set of customers.

Insight is all about teaching customers new ways of thinking, pushing them to rethink their current perspectives and approaches. And that’s exactly what Challengers do. They teach customers new perspectives in a compelling and assertive enough manner to ensure that the message drives action.

After initial formalities, assess your customer's problems yourself rather than asking them. Then, address the problem directly. Doing this builds your credibility.

• Introduce a new perspective that connects those challenges to bigger problems they haven't thought about.

• Present data that shows how you can increase their returns on investment and why the solution you're offering is going to save them from other losses or bad investments.

• Ensure you connect your solutions to their problems. Connect emotionally to each customer through your storytelling skills.

• It is all about the solution and not you the supplier. Convince them of the solution that you offer and make sure they're convinced that it is the best.

• Describe how you will bring the solution to life: the steps involved and the necessary things you will have to do.

A winning teaching pitch not only contains the technical knowledge that you offer the client, but it also has an emotional component. You need to tell a story that has a bit of suspense and surprises.

The best companies don’t win through the quality of the products they sell, but through the quality of the insight, they deliver as part of the sale itself. ~ Matthew Dixon and Brent Adamson

Your customers don’t want to see the charts and tables alone; they also want you to convince them that they are not wasting their money. Here are 6 steps to giving a world-class teaching pitch:

• After initial formalities, assess your customer's problems yourself rather than asking them. Then, address the problem directly. Doing this builds your credibility.

From a customer loyalty survey, it was found that decision-makers — people who sign the agreement — think of themselves as buying from organizations, not from individuals. This means that decision-makers care about sales reps that are easily accessible, and willing to collaborate with other suppliers when necessary. It also means that customers will repay you with loyalty when you teach them something they value, not just sell them something they need.

You should always remember that it’s not just the products and services you sell; it’s the insight you deliver as part of the sales interaction itself. One of the biggest obstacles that core reps struggle with when it comes to dealing with more than one board member is how to tailor the sales message to the satisfaction of these different stakeholders.

Challenger reps are naturally more comfortable talking about money, and they’re able to move the customer away from their comfort zone. They are confident because they trust the value that they offer the customer. While you can’t really change human behavior, you can give reps some practical tools for making sure that they don’t prematurely give in when it comes to intense value discussions. This is where the DuPont practice comes in.

DuPont provides a wide range of innovative products and services sold across many industries. The key to the DuPont practice of equipping sales reps to take control of a sale is to encourage them to have a plan. They do this by providing reps with a simple template for pre-negotiation planning based on BayGroup International’s Situational Sales Negotiation (SSN) methodology. This tool is all about ensuring that reps have the skills and tools to negotiate effectively rather than give in when the customer asks for concessions. The idea is to record all of the areas in which they have relative strengths with the customer and all the ways that they have relative weaknesses.

The next step is to find out what difficult questions and objections the rep is likely to get from the customer and how they plan to respond. It is always better to prepare answers in advance, rather than be forced to come up with a response. This step is followed by an examination of the specific things the supplier is looking for in the deal. Finally, the SSN template requires sales reps to analyze possible concessions to offer to the customer and concessions to request from the customer.

There’s also the 4-step framework that is tailored to reduce the sales CEO’s tendency to give in too soon to the customer. The steps are:

• Acknowledge and defer:

In response to a customer's protest about the price of an item, you could say, “I understand that price is something we need to address, but before we do, I’d like to take a moment to make sure I completely understand your needs — so we can make sure we’re doing everything we can to make this deal as valuable as possible for you. Is that all right?”

• Deepen and Broaden:

This uncovers the client's underlying needs. For instance, “What are you looking to achieve with a 30% reduction in price?”

• Explore and compare:

This tactic compares and evaluates the additional needs identified during the conversation. For instance, “What if we increase the warranty would the price be more acceptable?”

• Concede, according to an already made plan.

Sales reps need to be taught the importance of clarity of direction over quick closure, and how to create real value within the sales process. When combined, these skills can help them take control of any negotiation.